The sale of bankrupt Relativity Media’s assets received tentative approval by a New York Bankruptcy Court on Tuesday.
The decision by U.S. Bankruptcy Court Judge Michael Wiles clears the path for a group of senior lenders to purchase the studio’s film and TV assets for $250 million. heard multiple objections from major and minor creditors, ultimately approving a sale hearing for early October.
He also approved an increase in debtor-in-possession financing from $45 million announced last month to $49.5 million. That money provides collateral to allow that the studio to maintain current staffing and ongoing projects like the fall CBS series “Limitless.”
The key lenders, or stalking-horse group, consists of Anchorage Capital, Falcon Investments and Luxor Capital. Should Relativity resolve the judge’s standing issues and no other competitive bidders emerge by the end of September, the lenders will bypass an auction and proceed directly to a sale hearing in early October.
Manchester Securities — an early investor in the studio that had raised multiple objections to the expedited sale process — said it wanted more time to assess the studio’s true value and claimed it was “improperly shielded ” from deposing CEO Ryan Kavanaugh.
Manchester ultimately withdrew its objections after Relativity conceded to terms like allowing access to sales data and a right to partially consult on the stalking-horse bid. The company also dropped its concerns about residuals and other payments to creative unions like the Screen Actors and Directors guilds.